Suppose that the organization uses performance-based compensation. Most employees, however, consider their pay raises inequitable. Which of the following statements presents the most likely cause?
A)The majority of employees are poor performers.
B)The work performed by the organization does not lend itself to objective performance appraisal.
C)The organization is performing poorly.
D)Some part of the appraisal process has failed.

Question

Quizplus · Accepted Answer

If most employees consider their pay raises inequitable, it is likely that some part of the appraisal process has failed. This could include inaccurate or inconsistent measurement of performance, insufficient communication regarding performance expectations, or subjective rating biases. A failure in the appraisal process would result in performance-based compensation being perceived as unfair, even if the majority of employees are high performers or the organization is performing well.

Suppose That the Organization Uses Performance-Based Compensation